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Buy now or not?

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  • 14-04-2020 8:35am
    #1
    Cluster
    Registered Users Posts: 247 ✭✭


    Hi

    Ive sold my house and proceeds are sitting in my bank account. I am about to draw down a mortgage on anew build due later this year.

    My question is, should I be taking on a mortgage in the current climate


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    #2
    Trigger Happy
    Registered Users Posts: 6,080 ✭✭✭Trigger Happy


    It's a hard one and no one knows the future. Current circumstances make it hard to predict.

    But it it was me I would sit tight and not buy. There will be less demand for house purchases, both private and landlords, for some time after this crisis. And that will mean falling prices - a buyers market IMO.
    I would wait until things stabilize and then make a move.
    I cant see prices going up at all for some time.

    However, if the banks get in to trouble then getting a mortgage will also be harder for you. Stricter criteria like there was in 2009 and 2010.


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    #3
    AmberGold
    Registered Users Posts: 1,284 ✭✭✭AmberGold


    You are lucky, sit tight and wait.


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    #4
    Donald Trump
    Registered Users Posts: 19,129 ✭✭✭✭Donald Trump


    It would be no harm to have it spread across a few accounts.

    Just in case.


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    #5
    Marius34
    Registered Users Posts: 1,173 ✭✭✭Marius34


    Cluster wrote: »
    Hi

    Ive sold my house and proceeds are sitting in my bank account. I am about to draw down a mortgage on anew build due later this year.

    My question is, should I be taking on a mortgage in the current climate

    Are you sale agreed on particular house? Have you tried to negotiate?
    I would imagine that's the best time for negotiation, as construction companies will need finance to keep moving with their projects.


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    #6
    Gumbo
    Moderators, Society & Culture Moderators Posts: 38,565 Mod ✭✭✭✭Gumbo


    Buying a new build, later this year.
    When?
    Have you a refundable booking deposit down?

    Later this year will be a different country so as long as
    You don’t have to commit right now, just sit tight and make the decision when it
    Comes to time of paying the non-refundable deposit.

    On the other hand, where will you live in the meantime and will that cost you more?


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    #7
    bdmc5
    Closed Accounts Posts: 149 ✭✭bdmc5


    Trigger Happy wrote: »
    It's a hard one and no one knows the future. Current circumstances make it hard to predict.

    But it it was me I would sit tight and not buy. There will be less demand for house purchases, both private and landlords, for some time after this crisis. And that will mean falling prices - a buyers market IMO.
    I would wait until things stabilize and then make a move.
    I cant see prices going up at all for some time.

    However, if the banks get in to trouble then getting a mortgage will also be harder for you. Stricter criteria like there was in 2009 and 2010.


    There is a chronic shortage of housing already and its possible supply will dry up quickly if prices start to fall as people hold off selling as opposed to panic accepting reduced offers. I know people buying now urgently as worried they wont get a mortgage from abank in 6 months.


    I certainly dont think it will be a buyers market after this.There will be alot of uncertainty post crisis and which will translate to to limited supply of quality housing and potentially challenges of securing mortgages with banks. Unless very motivated to sell i dont see sellers accepting accepting "bargain" offers as there will be considerable pent up demand over these months of record low house sales.



    Im not buying or selling so its easy for me to say OP but im playing devil advocate to posters proclaiming a buyer bonnaza in the coming months.very possible the house you want now may not be available when you come back to market, Goodluck with final call


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    #8
    Cluster
    Registered Users Posts: 247 ✭✭Cluster


    Marius34 wrote: »
    Are you sale agreed on particular house? Have you tried to negotiate?
    I would imagine that's the best time for negotiation, as construction companies will need finance to keep moving with their projects.

    Clause in my contract that allows me to not go through with deal if i cant draw down the mortgage for any reason. Easy enough to invoke in this climate.


  • Options
    #9
    Cluster
    Registered Users Posts: 247 ✭✭Cluster


    Gumbo wrote: »
    Buying a new build, later this year.
    When?
    Have you a refundable booking deposit down?

    Later this year will be a different country so as long as
    You don’t have to commit right now, just sit tight and make the decision when it
    Comes to time of paying the non-refundable deposit.

    On the other hand, where will you live in the meantime and will that cost you more?

    Im settled for now in a house in the area we want to live in, renting. comfortable too so no issue there. A little bit more expensive but affordable.

    Im looking into that deposit this morning with the solicitor, good call.


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    #10
    Cluster
    Registered Users Posts: 247 ✭✭Cluster


    bdmc5 wrote: »
    There is a chronic shortage of housing already and its possible supply will dry up quickly if prices start to fall as people hold off selling as opposed to panic accepting reduced offers. I know people buying now urgently as worried they wont get a mortgage from abank in 6 months.


    I certainly dont think it will be a buyers market after this.There will be alot of uncertainty post crisis and which will translate to to limited supply of quality housing and potentially challenges of securing mortgages with banks. Unless very motivated to sell i dont see sellers accepting accepting "bargain" offers as there will be considerable pent up demand over these months of record low house sales.



    Im not buying or selling so its easy for me to say OP but im playing devil advocate to posters proclaiming a buyer bonnaza in the coming months.very possible the house you want now may not be available when you come back to market, Goodluck with final call

    I think you make extremely valid points here. Thank you for the input everyone, really helping.


  • Options
    #11
    lomb
    Registered Users Posts: 6,031 ✭✭✭lomb


    There's pros and cons with some unknowns. I know that no one gets rich off their own home though( well maybe the ex wife!)
    If you want to be a multimillionaire then buying your own home for 20/ less in a year or two won't cut the mustard. It's just a tool to live in while you get your ass out to work the next morning. If you can afford the payments then imo go for it.


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    #12
    awec
    Administrators Posts: 53,450 Admin ✭✭✭✭✭awec


    How tied/set are you on the area you are currently buying in? Would you be very disappointed if you couldn’t buy there or happy to look elsewhere?


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    #13
    Steer55
    Closed Accounts Posts: 226 ✭✭Steer55


    Cluster wrote: »
    Hi

    Ive sold my house and proceeds are sitting in my bank account. I am about to draw down a mortgage on anew build due later this year.

    My question is, should I be taking on a mortgage in the current climate


    If you can afford to throw away €50,000 euro, fire ahead with your purchase, if not hang on for 6 months and it will be best financial decision you ever made.


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    #14
    m5ex9oqjawdg2i
    Closed Accounts Posts: 11,221 ✭✭✭✭m5ex9oqjawdg2i


    Steer55 wrote: »
    If you can afford to throw away €50,000 euro, fire ahead with your purchase, if not hang on for 6 months and it will be best financial decision you ever made.

    Only if the OP is after a short term investment. If not, then the value drop is irrelevant.


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    #15
    Cluster
    Registered Users Posts: 247 ✭✭Cluster


    awec wrote: »
    How tied/set are you on the area you are currently buying in? Would you be very disappointed if you couldn’t buy there or happy to look elsewhere?

    Well kids are in school here and we love it so, we want to stay in and around here.


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    #16
    Cluster
    Registered Users Posts: 247 ✭✭Cluster


    Steer55 wrote: »
    If you can afford to throw away €50,000 euro, fire ahead with your purchase, if not hang on for 6 months and it will be best financial decision you ever made.

    The other issue might be my age (47) and the banks looking at that in say a depressed banking market in a couple of years time. might not want to lend to me then. or even 6 months time. Its a dicey move either way, I imagine.


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    #17
    awec
    Administrators Posts: 53,450 Admin ✭✭✭✭✭awec


    Cluster wrote: »
    Well kids are in school here and we love it so, we want to stay in and around here.

    We bought in the same area a few years ago (I think anyway, based on your other posts). The price was high (but lower than today), but well within our affordability.

    At the time we were living in a 2 bed apartment and had 1 child at the time, totally unsuitable. We are both mid-30s, so were starting to see reduced mortgage terms from banks. The mortgage payment on our 4 bed house is only marginally higher than the rent on our 2 bed apartment, and it's fixed for 5 years. Houses for rent in this area are scarce and they cost a packet.

    For us, with our kids, we knew we'd want the security of home ownership but also that we'd need to make school decisions.

    I think even if I was buying today I would proceed. Looking at it purely financially, house prices are very likely to go down. However there is also a decent risk that there is no decent housing stock in the area you want to live in. In uncertain times, people in nice houses in nice areas will by and large be the ones who decide to wait it out.

    But it also depends on your personal circumstances. I'd probably only proceed if the mortgage payment is a comfortable amount. If you're stretching, I wouldn't proceed. If you're buying a house you plan to live in forever, then when you make that final mortgage payment 20 years from now likely are you to be bothered that for a few years after 2020 your house was worth less than what you paid for it?

    On the flip side, if you're someone who'll worry about the value of the house cause you might want to sell in the near future, I'd hold off.

    It's hard for anyone to give real advice on here since it varies so much from person to person. It's not purely a financial thing when you're buying your family home. Good luck with the decision!


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    #18
    Cluster
    Registered Users Posts: 247 ✭✭Cluster


    awec wrote: »
    We bought in the same area a few years ago (I think anyway, based on your other posts). The price was high (but lower than today), but well within our affordability.

    At the time we were living in a 2 bed apartment and had 1 child at the time, totally unsuitable. We are both mid-30s, so were starting to see reduced mortgage terms from banks. The mortgage payment on our 4 bed house is only marginally higher than the rent on our 2 bed apartment, and it's fixed for 5 years. Houses for rent in this area are scarce and they cost a packet.

    For us, with our kids, we knew we'd want the security of home ownership but also that we'd need to make school decisions.

    I think even if I was buying today I would proceed. Looking at it purely financially, house prices are very likely to go down. However there is also a decent risk that there is no decent housing stock in the area you want to live in. In uncertain times, people in nice houses in nice areas will by and large be the ones who decide to wait it out.

    But it also depends on your personal circumstances. I'd probably only proceed if the mortgage payment is a comfortable amount. If you're stretching, I wouldn't proceed. If you're buying a house you plan to live in forever, then when you make that final mortgage payment 20 years from now likely are you to be bothered that for a few years after 2020 your house was worth less than what you paid for it?

    On the flip side, if you're someone who'll worry about the value of the house cause you might want to sell in the near future, I'd hold off.

    It's hard for anyone to give real advice on here since it varies so much from person to person. It's not purely a financial thing when you're buying your family home. Good luck with the decision!

    Yep, well said and in that area.


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